Price Check: Costco-nomics

When we finally took the plunge and became Costco members two years ago, I had some lingering doubts about whether our membership would actually be a good deal. I knew it would pay for itself that first year with the savings on Brian's new glasses, but I was less sure whether it would be worth sticking with in the long term.

Well, after a year and a half shopping at Costco, I'm now in a better position to answer that question. I already figured out, after less than a year, that paying extra for the "Executive" membership was not a good value. Fortunately, thanks to the special deal offered by our Costco (which they did honor, even though we never actually got it in writing), we were able to recoup the extra $60 we'd paid for it before downgrading to a regular membership at $60 a year. So at this point, if our Costco membership is saving us at least $60 a year, it's a good deal, and we should stick with it whether we happen to need new glasses or not.

The most obvious perk of our membership is the rewards we get from our Costco credit card (which we still have even after dropping the "Executive" membership). This gives us 2% cash back on all purchases at Costco itself, 3% at restaurants, a whopping 4% on gas, and 1% everywhere else - the same base rate we get with our other rewards cards. Over the last year, all that added up to $57.35.

On the face of it, this looks like nearly enough to pay for our membership all by itself. However, the figure is a little misleading, because if we hadn't been using our Costco card for all that stuff, we would have used one of our other rewards cards, which also pay 1% cash back most of the time. In some categories, at some times, they pay 5% cash back, but whenever that's the case, we use that card rather than the Costco card. So we've never actually lost money by paying with the Costco card; the question is, how much did we really gain?

To answer that question, I consulted the handy rewards summary provided by Citibank, the issuer of the Costco card. According to this, here's where we earned our rewards in 2018:

• 4% On Eligible Gas Worldwide: $34.91. If we'd put this on any other card, we'd have earned 1% cash back, or $8.72, so our card actually saved us $26.18 in this category.
• 3% On Restaurant Purchases Worldwide: $1.26. This doesn't account for all our restaurant purchases over the year; some of them were made on other cards that were temporarily offering 5%, and some were probably put on other cards at 1% by accident. So in all likelihood, we could be getting more out of this benefit than we are, but for 2018, it saved us only $0.84—$1.26 less the $0.42 we'd have saved using a different card.
• 3% On Eligible Travel Purchases Worldwide: $0.00. Spent nothing, got nothing.
• 2% On Costco & Costco.com Purchases: $14.47. Assuming that all the stuff we bought at Costco is stuff we would have bought somewhere else using a different card at 1% cash back, our actual savings on this was $7.24.
• 1% On All Other Purchases: $6.71. This is exactly what we would have earned using any other card, so no savings here.
• Total actual savings for 2018: $34.26.

That means our total actual rewards from our Costco card came to $34.26—more than half our our $60 membership cost. Not bad, but what about the other half? Did we save enough to cover that as well?

Well, that's a little trickier to figure out, since I unfortunately did not think ahead and save all my receipts from Costco over the past year. However, I have the receipt from our most recent trip, which includes:

• Raisin bran, 14.34 pounds: $21.87. Yes, I know that's a lot of cereal. Brian was stocking up because Costco doesn't always have it, and at this time there's no other store that can meet his target price of $1.60 or less per pound. Buying the equivalent amount of raisin bran at Aldi, the next cheapest option, would have cost us $24.38, so that's a savings of $2.51.
• Birdseed, 80 pounds: $27.98. Man, can those birds eat. Leaving aside the question of whether we're really getting our money's worth in entertainment (for us and for the cats) out of all the seed we stuff into them, the equivalent amount of birdseed at Lowe's would have cost $31.96. Savings: $3.98.
• Organic raisins, 4 pounds: $10.79. (These are one of the few products we always buy organic, due to concerns about pesticide residues. Grapes are part of the EWG's "dirty dozen" list of the most contaminated foods, and drying them concentrates the pesticides still more.) The same volume at Trader Joe's would cost $11.96. Savings: $1.17.
• Walnuts, 3 pounds: $10.89. These would cost $14.97 at Aldi, the next cheapest seller. Savings: $4.08.
• Brussels sprouts, 2 pounds: $4.99. This is actually the same price as Trader Joe's; we just grabbed some since they were handy. Savings: $0.
• Canola oil, 6 quarts: $7.69. Shop-Rite price: $9.00. Savings: $1.31.
• Organic sugar, 10 pounds: $7.99. This is less than half the $17.45 we'd pay at Trader Joe's, and there's less packaging as well. Savings: $9.46.
• Clementines, 5 pounds: $5.49. We only buy these when they're on sale for around this price, so no savings.
• Total savings from this trip: $22.51.

So. on just this one trip to Costco, we saved $22.51 on a total bill of $99.54, meaning we saved about 22% of what we spent. And according to our rewards summary, we spent a total of $723.50 at Costco in 2018 ($14.47 divided by 2%). And that did not include any large, one-time purchases like Brian's new glasses, since we bought those in 2017. (I didn't get new glasses last year, though I think I'll definitely need them this year.)

So if we estimate that we're saving an average of 22% on the goods we buy at Costco, we probably saved around $159.17 on everything we bought in 2018. Add in the $34.26 in credit card rewards, and our card is netting us $193.43 per year—more than three times the cost of our $60 membership.

For us, then, the numbers tell a clear story: our Costco membership is definitely paying for itself, even in years when we don't need new glasses. Your mileage, of course, may vary. If you have a Costco membership, it's probably worth going through this exercise for yourself to get an idea of whether it's a good value for you. But if your situation is like ours—you only buy a few things at Costco, but you save a significant amount on them—it probably will be.

 

[EDIT, 7/21/26: Our Costco membership recently went up to the oddly specific figure of $69.31, so I decided to run through this exercise again to make sure it was still paying for itself. The short answer: And how. The rewards on our Costco card are netting us $40.57 per year, but that's dwarfed by the amount we're saving on groceries. On our last two trips to Costco, we spent $76.93 on items that would have cost us, as near as I can tell, $122.37 to buy elsewhere. That's a savings of $45.44, a whopping 59% of the total. Multiply that percentage by the $870.5 we spent at Costco last year, and our membership saved us $514.18 on purchases. With the $40.57 in rewards, that's a total of $554.75—roughly eight times what we're paying for membership. In these inflationary times, it appears, Costco is a better deal than ever.]

Money Crashers: 7 Government Imposter Scams to Watch Out For

Have you ever gotten one of those calls from someone at the IRS, warning that you owe unpaid taxes and you must pay up at once or risk immediate arrest? Or maybe from the National Sweepstakes Bureau, calling to tell you that you've won a big prize and you'll only have to pay a small fee to collect it?

If you have, then you know by now these calls are bogus. But it's possible you went through at least a few heart-stopping moments, and possibly quite a lot of hassle and expense, to find it out.

If you want to avoid having this happen to you again—or having it happen for the first time, if you've never experienced it—my new Money Crashers article can help. It discusses the ins and outs of various imposter scams, in which fraudsters impersonate government officials to separate you from your money (or, in some cases, your personal data). I outline the most common types of government imposter scams, tips for spotting and avoiding them, and information on how to report the scammers so they can't pull the same tricks on other people.

7 Government Imposter Scams to Watch Out For

My new collapsible travel mug

Last month, during Thrift Week, I noted that one disposable item I'd so far been unsuccessful in eliminating from my life was takeout coffee containers. I had, on occasion, brought my own mug along on a planned visit to a coffeehouse, but a mug big enough to accommodate even a Starbucks tall (12-ounce) beverage doesn't fit easily into my purse, so carrying one around with me on a regular basis was impractical. And since most of my visits to the coffee shop are impromptu, I almost always ended up saddled with a disposable cup.

However, I discovered that it is possible to buy a collapsible travel mug made of silicone that folds up small enough to fit in my purse, so I could carry it with me at all times. So I vowed at the time of my post that, if no one else got me one for my birthday, I'd get one for myself. And now, a month later, I not only have one but have finally had an opportunity to use it, so I can report on the success of the experiment.

The mug I got is not the Stojo Biggie I was originally considering, but this one from CreateLife, which is a bit cheaper and looked easier to use. It's a bit bigger than I expected: about 3.75 inches in diameter and 1.75 inches tall when fully collapsed. I had to move things around a bit in my purse to make room for it, but I was able to fit it in. When expanded to full size, it has a capacity of 550 mL, which means it can accommodate up to a Starbucks grande (16 ounces).

When I deployed this for the first time at Starbucks yesterday, I was pleased to see that the staff didn't bat an eye at my request to use my own mug. It even made collecting my order a bit easier for me, since I could see at a glance which drink was mine. It held my tall peppermint mocha with plenty of room for the whipped cream.

Drinking from the mug was a little bit more complicated than drinking from a disposable cup. Since the mug is made mostly of soft silicone, the only part that's rigid is the plastic sleeve that fits around the middle. So you have to take care to grab the cup only by that rigid middle section, not by the soft part, or you'll end up squeezing it too hard and splashing coffee everywhere (or possibly burning yourself, since the silicone parts also don't provide as much insulation). But I found this quite easy to adjust to.

I found it easy to drink from the cup with the lid off, but I couldn't put the sippy-cup lid to a good test, since I'd just come from the dentist and couldn't pucker up my mouth properly. I tried it later on with some water and it worked fine, but I still don't know how good it is for protecting your mouth from scalding hot liquid. The sippy top also has a little silicone tab that you can close up to prevent splashing—something you can't do with a disposable Starbucks cup.

Cleaning the cup was also quite easy. I just swiped it with the dish wand, then rinsed it, same as any other mug. However, I must admit that the silicone material tends to hold on to odors a little bit. When I got the cup out just now to test its capacity, I found that if I stuck my nose right inside, I could still faintly detect the odors of chocolate and peppermint. Not that I mind this, but it might be a bit incongruous if I wanted to fill it up with, say, hot cider on my next visit. But since I expect to use it pretty much exclusively for coffee, I think it will be fine. (I also didn't notice that the water I drank from it had any discernible hint of peppermint mocha flavor.)

Collapsing the mug back down after use is a bit tricky. If you just stick your hand on the top and shove it down, it won't fold neatly, as you can see here. So instead, you have to work your way up from the bottom, pushing it in gently section by section, then screwing on the top.

This will get it to a mostly-collapsed form, with only the bottom end sticking out. However, it's possible to push it in still further if you open the sippy-top tab, push the bottom in, then close the tab. This creates a vacuum that keeps it fully collapsed, so it's easier to fit in the purse.

So based on this first use, at least, I have no real complaints about this collapsible mug, and I consider it the ideal solution to my disposable-cup problem. Of course, only time will tell how durable it is, but if this paper from Tufts is to be believed, as long as I get at least 17 uses out of it, it should have a lower carbon footprint than the paper cups and plastic lids it replaces.

The Reverse Kondo

Last week, I came face to face with a real-life example of the sunk cost fallacy, one of the cognitive biases I wrote about in my Money Crashers piece. Based on the recommendations of several YouTubers, I'd ordered a pair of jeans from Fashion Nova in the hopes that they might actually fit both my waist and my butt (despite the 12-inch difference in circumference between the two). Unfortunately, these turned out to be absolutely not what I wanted; they were skin-tight almost everywhere from my belly button down to my knees, except in the places where they bunched up oddly around the crotch.

Even more unfortunately, in my eagerness to seize on what I hoped would be the jeans of my dreams, I'd neglected to check the site's return policy. I wasn't too concerned about the cost of return shipping; the real shocker was discovering that the site doesn't offer refunds at all. The best I could do was return the pants, at my own expense, in exchange for store credit. But since the entire site is definitely aimed at much younger women who like to show a LOT more skin than I do, it was highly unlikely I'd find anything else I liked. Rather than shell out more money to send back the jeans in the almost certainly futile hope of getting something for my investment, it made more sense to write them off as a loss and give them to the local thrift shop, where they might find a new owner who could actually wear them.

Once I'd decided to give away the jeans, it occurred to me that I might as well go through the rest of my closet and see if there were any other items in there that would be put to better use on someone else's back. And while I was at it, I asked Brian if there was anything he wanted to get rid of, and he ended up trying on everything in his side of the closet and ditching a sizable percentage of it. By the time we were done, we had one big box filled to overflowing with clothes to donate, and another small bag of stuff in such crappy condition it was fit only for textile recycling. (The Repurpose NJ boxes we've used in the past are no longer available, but it turns out they offer textile recycling at H&M stores, and maybe they'll have some jeans that fit me.)

Now, if we'd been following the principles of the highly trendy Marie Kondo as we went through this exercise, we'd have needed a much bigger giveaway box. In fact, we'd probably have ended up with almost nothing left in our closets. Her standard is that the only items you should have in your closet are those that "spark joy" in your heart when you touch them, which seems to me like an awfully high bar. I mean, I wouldn't say any single pair of underpants I own sparks joy for me, but I know I'd miss them if they weren't there.

So instead, we hit on a standard you might call the Reverse Kondo. (The Odnok, if you will.) We weren't going to insist that our clothes spark joy, but at the very least, they shouldn't spark annoyance. Any item that we felt bad about every time we saw it in the closet, for any reason—guilt, frustration, disappointment, regret, whatever—had to go.

Using this standard, we discarded:

• Clothes that were either way too big or way too small
• Clothes we'd both received as gifts and never worn
• A couple of sweaters I bought because I loved their bright colors, but never wore because they made me look like a fuzzy beach ball
• A skirt that I used to wear a lot, but no longer felt enthusiastic about
• A couple of wool neckties Brian had inherited from his grandfather and never worn (on the maybe two occasions per year when he actually wears a tie, he prefers a silk one)
• Items that we never wore because they were duplicates of other items we liked better (like Brian's less-favorite pair of beige pants)
• Most difficult of all, but necessary: a dress I'd bought as my all-purpose, go-to dress for any kind of slightly dressy occasion in warm weather. I had, in fact, worn it at least once, so I knew it was useful—but I had to face the fact that I'd never really liked it. I felt unsure about getting rid of something that fit perfectly and was still serving a purpose, but I knew I'd never actually be happy wearing it, and that seemed like the polar opposite of sparking joy.

However, under the same standard, we kept:

• A few pairs of pants that Brian wore only occasionally
• Another couple of sweaters that were fairly shapeless, but so warm that on cold days, I was willing to wear them anyway
• A dress that I hadn't worn in years and didn't consider very practical, but that caused Brian to go "Hubba hubba!" when I tried it on

In short, anything that there was a reasonable chance we would miss when it was gone is staying in the closet. Anything we will never notice the lack of—or feel actively relieved to see gone—is going to a new home. And our closet will be less crowded, but will still contain enough clothes to meet our everyday needs, and our less everyday ones as well.

Recipe of the Month: Malai Kofta

On Friday, Brian spontaneously decided to try making Malai Kofta, those spicy little potato dumplings often seen at Indian buffets, floating in a creamy coconut-based gravy. This dish had always been a favorite of his in Indian restaurants, but he found it a little annoying that there always seemed to be too much sauce and not enough dumplings. And since he knew he had a can of coconut milk in the pantry for the sauce, he thought, why not give it a try?

Many recipes for Malai Kofta call for paneer, an Indian soft cheese. Since we didn't have any of that on hand, and since we've been trying to cut down on dairy anyway, he found a vegan version of the dish at One Green Planet, which used a combination of potato, carrot, and peas for the dumplings. (It also called for two tablespoons of chopped toasted cashews, which gave him an opportunity to use up a little handful of those that had been lurking in our pantry for a while.)

However, he still ended up having to make quite a few substitutions to this recipe make it work with what we had in our pantry. These included:

• Replacing the chick pea flour in the kofta, which we didn't have, with regular flour.
• Replacing the tomatoes in the sauce with canned crushed tomatoes.
• Replacing 1 cup of coconut milk and 1 cup of water with one can of reduced-fat coconut milk from Trader Joe's. In the first place, that was what we had, and in the second, using the whole can didn't leave us with any little dregs left over that might be hard to use up.
• Replacing the serrano pepper, which we didn't have, with 1/4 of a jalapeno pepper, which contains about the same total amount of heat.
• Replacing the yellow onion, which we don't keep on hand these days since I found they tend to disagree with me, with half of a milder red onion.
• Omitting the cilantro from both the kofta and the sauce, since (a) we didn't have any, (b) it's expensive to buy at the store, and (c) I don't care for it much anyway.
• Increasing the salt in the gravy from a barely detectable quarter-teaspoon to a full teaspoon.
• Adding a teaspoon of brown sugar to the gravy to sweeten and soften the flavor.

Between the vegan recipe and the changes Brian made to it, this dish came out a bit different from the versions we'd had before. One change that Brian appreciated was that the recipe made plenty of dumplings, so we could take as many as we liked instead of being limited to one lonely little kofta swimming in a sea of gravy. I also noticed that the texture of the dumplings themselves seemed to be chewier, perhaps due to the absence of the crumbly paneer or perhaps because of the flour-for-chick-pea-flour substitution. They were still quite tasty, but a bit hard to cut through with a fork. It almost seemed like they'd work better as a finger food, with the gravy on the side as a dip, rather than a main course served in a bowl over rice. But aside from this minor quirk, the dish was pretty much the same as the one we'd enjoyed before in Indian restaurants: lightly spicy dumplings in a tangy gravy flavored with coconut.

As to whether we'd make it again, I'd say that's mainly up to Brian. I liked it and would certainly be willing to eat it again, but I didn't love it so much that I'd request it specifically. So it's a question of whether he was happy enough with the results to be willing to put in the work required to make it. Asked about this, he said it "required a bit of coordination" but wasn't really that hard to make, and he rather enjoyed doing it. And another perk of the recipe is that all the ingredients in it, aside from the cashews and coconut milk, are things we tend to keep in the house. All in all, Brian says he'd "happy to make this again at the next opportunity"—and maybe even go so far as to put cashews and chick pea flour on the shopping list specifically for that purpose.

Money Crashers: 4 Budgeting Alternatives to Meet Your Financial Goals

I'm about to confess something that's probably pretty shocking for a personal finance writer: I don't have a household budget. In fact, I've never had one.

Now, this is not to say that I don't keep track of my household spending. I do, and pretty rigorously at that. This started way back when Brian and I were courting, when we began keeping track of the amount each of us spent traveling to visit the other and splitting the cost; later, when we set up housekeeping together, we started tracking how much each of us spent on joint household expenses and balancing out the difference at the the end of each month. By the time we got married and combined finances, I had decided that having this record of how we spent our money was useful, so I just kept doing it, only with a single column for our expenses instead of two. And eventually, I decided to start recording all these expenses in a spreadsheet, so that I could keep track of how much we spent in each category and tamp it down if it started getting too high. So I am very much aware of where our money goes.

What I've never done is to set any strict, specific limits on how we could spend it. That is, my spreadsheet tells us that last month we spent $202 on food, but it doesn't say that we're only allowed to spend $202 (or $250, or $300) on food this month. I just keep track of the numbers and note when they move up or down by any significant amount, in which case I (a) look for ways to cut back if necessary, and (b) usually, write a post here about the reason.

Now, according to the mainstream finance community, this failure to maintain a personal budget should mean that all our attempts to save money and meet financial goals are doomed from the start. The vast majority of articles on how to save (including one I wrote myself two years ago) lead off with, "Make a budget," and many of them (though not mine) warn that without one, it's basically impossible to control your spending. The clear assumption is that if you don't set firm limits on your spending in specific areas, you'll automatically run through all your money, leaving nothing for savings, and never get any nearer to your financial goals.

However, I happen to think that our own experience shows this isn't true, at least not for everyone. After all, in all the years Brian and I have lived together without a budget, we've managed to not only buy a house but pay it off, and are now aiming for financial independence and possible early retirement some time in the next five years. So clearly, the lack of a budget has not, in itself, been enough to derail our efforts to save.

Nor are we alone in this. Several other successful individuals—including an investment guru who achieved financial independence at age 37, a finance blogger who accumulated $256,000 in retirement savings by the age of 28, and Amy Dacyczyn of "Tightwad Gazette" fame (all hail the Frugal Zealot!)—all say they have never had formal budgets, and some of them go so far as to say budgets don't work.

Personally, I think that's a bit of an overstatement. Budgets clearly do work for some people, but that doesn't mean that they're an absolute necessity for everyone. In my latest Money Crashers article, I've outlined some of the reasons budgets don't work for everybody and described four alternatives—including our own tracking method—that can work without all the restrictions, or all the paperwork, of a formal budget.

Now, if you already have a budget and you're happy with it, great—you don't need to read this article. But if you don't have a budget, or if you keep trying to make one and can never stick to it, this piece could be just what you need to get your finances on track. And if your finances, like ours, are already on track despite the lack of a budget, yet you still feel obscurely guilty for not having one, this article can help you put those concerns to rest.

 4 Budgeting Alternatives to Meet Your Financial Goals

Gardeners' Holidays: Renewal

I'm starting to think I should change the name of the first Gardeners' Holiday of the year to Polar Vortex Day. This is the second year in a row we've suffered subzero temperatures around the end of February and only just managed to emerge from our cocoon to get the plum trees pruned.

But that would be focusing on the negative, and Gardeners' Holidays are supposed to highlight the positive. This first holiday, in particular, is not about the bitterness of the winter cold, but about the idea that we're finally starting to emerge from the cold and start pushing our way toward spring. Despite the frigid weather of the past week, the first faint signs of new life are there if you look: tiny buds on the branches of the plum trees and, on the rosebush, even hints of tender leaves ready to uncurl. Winter isn't over, not by a long shot, but we've made it to the middle of the cold season and we're now on our way out.

So as cold as it is right now, and as far as it may feel from planting weather, it's still the start of a new gardening season, and we need to start putting our garden in order for it. To that end, we've started our first seeds of the year, the parsley, in some tubes full of baked garden soil (which Brian dug up a few weeks ago and baked in the oven last weekend to kill germs - running the vent fan on high all the while to get rid of the awful smell that accompanies this process) topped with a layer of commercial seed-starting mix. (The upright cartons you can see in the background are filled with plain soil in which he's attempting to start some pawpaw seeds, in the hope that he can grow one or two of these curious native fruit trees in the rear corner of our yard. He's promised me that the full-grown trees won't shade the garden significantly, and also that he won't expect me to eat any of the fruit.)

And this afternoon, once it got warm enough to venture outdoors, we went out and pruned our plum trees in the hope of combating the brown rot that's been destroying most of our crop. We didn't have to take off as much this year as we did last year, but we still ended up lopping off several largish branches and a whole mess of little twigs to eliminate all the points of overlap between branches—both on the same tree and between the Opal and Mount Royal trees. I tried to get some shots of the actual pruning, but a picture of a single branch being cut doesn't really convey what a long, fiddly process it was, with Brian wielding the clippers and me walking around the trees to identify spots that needed clipping, armed with a long pruned-off stick as a pointer so I could reach the high-up branches. But I did manage to get a picture of the carnage afterward—or perhaps, since it's wood and not flesh, I should say "lignage."

We're not relying on pruning alone to protect the plums from damage, however. The anti-fungal spray we tried last year didn't do much, possibly because Brian had nothing more effective to apply it with than a squirt bottle, so this year we've decided to pull out some bigger guns. We went to the Belle Mead Co-Op about a month ago and bought a bottle of a spray called Serenade, which I'd seen listed in the Fedco Seeds catalogue and which got high marks from users online. It's in a concentrated form, so this 1-quart bottle, which cost us $19, should make about 16 gallons of spray. We also spent about $10 for a sprayer that can be hooked up directly to the garden hose, allowing us (well, Brian really, since he's taller) to dispense it more effectively over the entire tree. The third product you see in the picture is Tree Tanglefoot, which we're planning to deploy once the plums start developing in hopes that it will deter the squirrels from climbing the trees and pilfering them all. Even if it only cuts down on their depredations and doesn't stop them, we can hope to get some plums that way, which is more than we got last year.

I have one more task to do to get ready for this upcoming gardening season: plotting out the beds to decide where each crop will go. This process should be a little easier than it's been in the past, because I've come up with a new system of rotating and flipping entire beds instead of trying to move around individual crops. So, for instance, if last year the tomatoes were in the left rear bed with the basil, marigolds, other herbs, and one pepper plant, then all those crops will still be together this year in the left front bed. However, I will also flip the bed along the y-axis so that the pepper is at the opposite end from where it was last year, so I'm not growing pepper plants in exactly the same spot two years in a row. (Ideally, I wouldn't grow them in the same spot more than once in four years, but this is the best I can do with my limited garden space.) So laying that out shouldn't take more than a few minutes.

And once that's done, all we have to do is sit back and wait for the weather to warm up—as we can trust it will—so we can start planting.